Historically, a company creates a product to fill a need or want in its immediate marketing area. As the company grows, it expands the marketing area until the product is marketed nationally. After a product reaches national distribution, the company typically decides to either expand internationally or develop other products and remain a national distributor. With the growth of the global economy in recent years, even start-ups now build eventual international distribution into their initial business plans. Companies now need to consider the challenges of international distribution in the initial product development process.

Social Challenges

Products are developed to meet a specific need or want. Just because we have a need or want in the U.S., doesn’t mean that need or want is universal. Different countries are at different stages of economic development, and the need or want we have might not have developed in enough other countries to create a viable target market. Other countries have different cultures and different food preferences, grooming habits, living quarters, recreational opportunities, lifestyles and clothes. English speakers might be few. Brand names may not translate appropriately. Countries may have no interest in a particular good or service that is selling well in America.

Technical Challenges

American companies have done a good job of standardizing technology, but so have other countries, and those standards don’t always match. Standard electrical voltage differs from country to country, so products must be designed to run on different voltages, and they need different plugs to fit different receptacles. Local water pressure might be different. Lettering on dials, knobs, levers or buttons might need to be in different languages. Some use Fahrenheit systems to measure temperature while others use Celsius. Some use metric measurements, while some use other measurement systems. Raw materials readily available in America might not be available in other countries. Phone, radio, television and ISP signals might be totally different from country to country.

Legal and Regulatory Challenges

Some countries prohibit the importation of certain items to protect domestic industries. Others might require government approval to operate or require you work with local partners. Trademark, copyright and patent protection laws might be nonexistent. Different environmental regulations might have to be observed. Certain products might be banned for political or religious reasons. Permits or licenses might be needed to perform basic activities. You may not be able to overcome some of these challenges, so it is important to understand them before you invest resources.

Distribution Challenges

In America, if you can get Wal-Mart and Target to carry your product, you have instant national distribution. Most other countries don’t have that type of national distribution available to them. You have to work with dozens of regional chains, distributors and independent stores. Many countries, such as India, have large outlying areas that are served by thousands of small mom-and-pop stores or retail trucks. It can be a real challenge to get your product from the import docks to a place where a customer can buy it.

Promotional Challenges

In America, we have a variety of effective methods to promote a product and communicate with our customers. We can use television, radio, direct mail, magazines, social media, billboards, telemarketing and product placement in movies. Many other countries just don’t have these promotional methods, certainly not to the extent we have here. You may have to use a grass roots approach, which is much harder. In addition, there may be cultural limitations. Our promotions tend to have a sexual orientation. The beautiful model as spokesperson, shot in reveling swimwear or with plunging neckline might be taboo in many companies. You may find you have to use methods with which you have no experience. You might have to completely redo packaging or promotional materials at considerable expense.

About the Author

After a 30-year career in the business world in more than 15 countries, Jim Tischler moved to university academia to teach and write about business, international trade and economics for the past 12 years. He earned an MBA in 1977.